Karl Polanyi Essay ⋆ Sociology Essay Examples ⋆ EssayEmpire

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Karl Polanyi was an interwar immigrant from Central Europe who was very influential in political economy, economic anthropology, economic sociology, and institutional economics. Influenced by Owen and Marx and his interwar experience of the cataclysm that a poorly instituted political economy can provoke, his central interest became the problem of lives and livelihood: the relation of individual and community life to the manner by which the community makes its living -the place of economy in society. Polanyi laid out these concerns in his classic book, The Great Transformation, and later co-directed (with Conrad Arensberg) the Columbia University project which resulted in the very influential volume, Trade and Market in the Early Empires.

Polanyi’s analysis of market capitalism centered on the concept of a double movement. He considered the application of the self-regulating market mechanism to the necessary task of social provisioning to be profoundly disruptive of the social order. This social disruption induced a spontaneous socially protective response directed at limiting the self-regulating market system to contain its erosion of social and community life.

Polanyi’s work in economic anthropology expanded his criticism of the market mentality by developing the contrast of its formalist methodology of rational choice to the substantive, provisioning view of economic life. He emphasized that market exchange was only one pattern of integrating the social division of labor and developed the concepts of socially structured reciprocity and redistribution transactions. He saw the market pattern to be ultimately receding in the face of the protective response, and formalist economics, an explicit expression of the market mentality, to be incapable of comprehending the past, and therefore unable to guide the imagination of the future.

Polanyi may be considered an early post-Marxian in that he emphasized the Marxian concern with lives and livelihood but presented a different conception of the tendencies of market capitalism. Polanyi’s analysis suggests that the protective response interferes with Marx’s laws of motion of capitalism. Polanyi is a forerunner of today’s non-essentialist Marxism and has much in common with the postmodern deconstruction of metahistorical imperatives.

Bibliography:

Levitt, K. P. (ed.) (1990) The Life and Work of Karl Polanyi: A Budapest Celebration. Black Rose Books, Montreal.
Stanfield, J. R. (1986) The Economic Thought of Karl Polanyi: Lives and Livelihood. Macmillan, London.